Direct Labor Variances
The following data relate to direct labor costs for the production of smart tablets.
Actual: 6,300 hrs. at $23.00 $144,900
Standard: 6,000 hrs. at $24.50 $147,000
a. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.
Rate variance $
fill in the blank 1
Favorable Variance
Unfavorable Variance
Select
Time variance
fill in the blank 3
Favorable Variance
Unfavorable Variance
Select
Total direct labor cost variance $
fill in the blank 5
Favorable Variance
Unfavorable Variance
Select
b. Which of the following statements regarding causes of these labor variances is false?
The workers produced the smart tablets more quickly than expected.
The workers were more highly paid than expected.
The cost savings obtained through more faster production times were offset by higher wage costs.
The cost savings obtained through lower wage costs were offset by slower production times.
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